Healthcare Workers, Community Oppose Sale of Six Safety-Net Hospitals to Prime Healthcare

[Aug. 15, 2014] LOS ANGELES – State legislators, community members, faith leaders and healthcare workers today expressed their opposition to the potential sale of six California safety-net hospitals – including two in Los Angeles County – to for-profit Prime Healthcare, which has threatened to put the facilities into bankruptcy.

Prime is under federal investigation for allegedly overbilling Medicare and has a history of buying struggling hospitals and reducing patient services, raising prices and laying off large numbers of staff in order to increase profits.

The Daughters of Charity Health System, which is an important provider of healthcare to low-income people in Los Angeles and throughout California, has been in financial danger for more than a year, losing roughly $10 million a month since January. Healthcare workers and supporters urged the Catholic healthcare system to select a buyer that would honor the system’s historic mission of serving the community, and prioritize the interests of patients and caregivers.

“Our hospitals are rooted in caring for all of the community and we can’t afford to see these hospitals fall into the wrong hands,” said Stanley Clay, a pharmacy technician at St. Vincent Medical Center. “After working 41 years, I was planning on retiring next March but I don’t know what’ll happen if Prime takes over and puts us into bankruptcy. It’s scary because if they wipe out my pension I’ll need to find a new job and that’s not easy when you’re 65 years old.”

The selection of a lead bidder to purchase the Daughters of Charity Health System is expected to be announced in September. Daughters operates six hospitals in northern and southern California and handles 800,000 patient visits annually.

Other speakers at the protest included Assemblymember Isadore Hall (D-Compton), Fr. Richard Estrada, Elba Romo of Our SALUD, and Tony Price, a radiology technician at Centinela Medical Center in Inglewood, which is owned by Prime Healthcare.

The Daughters of Charity Health System includes St. Vincent Medical Center in Los Angeles and St. Francis Medical Center in Lynwood. Prime’s CEO Prem Reddy has threatened to put the hospitals into bankruptcy if it purchases them and can’t get major contract concessions from the unions representing workers in the facilities.

But Prime is not the only substantial bidder. Blue Wolf Capital Partners, a major private equity firm, is also submitting a competitive bid and pledges to maintain the community based, safety net approach that has characterized the Daughters of Charity system, as well as protect the systems caregivers.

In addition to the two southern California facilities, the Daughters system also includes Seton Medical Center, Daly City; Seton Coastside, Moss Beach; O’Connor Hospital, San Jose; and Saint Louise Regional Hospital, Gilroy.

SEIU-UHW represents workers at three Prime-owned hospitals in California and currently has a labor dispute with the company.